tv Nightly Business Report PBS September 5, 2013 6:30pm-7:01pm PDT
is this is nig"nightly busis report" with tyler mathisen and susie gharib brought to you by. >> sailing through the heart of historic cities and landscapes on a river you get close to iconic landmarks, to local life, to cultural treasures, viking river cruises, exploring the world in comfort. three is the magic numbers, stocks had gains for the third straight day but the yields on the ten-year treasury zeroed in on 10%. >> eyeing tomorrow, that's what wall street and the federal reserve are doing to the august jobs report as the key to the question, when will the fed
start to taper? and the economics of alzheimer's, the race is on to find a real treatment for the disease. it could be a god send for patients and a wind fall for the company that finds it. we have this and more for thursday, september 5th. good evening everyone. i'm susie gharib. >> i'm sue herrera in for tyler mathisen. the benchmark on the ten-year treasury mark touched the threshold of 3% for the first time since july of 2011, and with the yield edging higher, the month's long sale off today accelerated. that's because some stronger than expected economic data reinforced belief that the federal reserve policy makers may be closer to easing back on the bond buying stimulus plans. yield on the ten-year highest since july of 2011. stocks inched higher getting help from strong economic
reports, more of that in a minute, all pointing to an improving economy. volume was light because of the jewish holiday of rosh ha shan gnaw. there was good news today that helped lift the market kps expectations about friday's august jobs report. hampton pearson has more. >> reporter: ahead of tomorrow's august jobs report from the labor department, new indicators the jobs market is stabilizing. expectations are for 170,000 new payroll jobs. today private employers hit the target according to payroll data processer adp and the government says first time unemployment claims hit a five-year low. >> the labor market keeps grinding away, but we have a long way to go before we'll be normal. we have to generate another 1.5 million private sector payroll jobs before we replace all the jobs that we lost.
>> reporter: help may be on the way from the service sector that employs 90% of the work force. news that companies expanded at the fastest pace in yearly eight years last month. with both sales and new orders growing, employers ramped up hiring. leading economists want to see if we get payroll growth matching what they are telling us about the service sector. >> it will be crucial about payrolls, if they confirm the strength we saw in the report that will be a strong message for the fed to get going. if they don't, if they get a 150 or something like that on payrolls, i think people will quickly forget about the purchasing manager reports. >> reporter: the august's jobs report is duty leading economist and market watchers as a final piece of the puzzle when the federal reserve meets in two weeks. no matter what the job situation may be american
consumers appear to be a bit more cautious these days, especially when it comes to buying new clothing and accessories. while costco, the buckle, walgreens and more topped estimates on retail sales in august, other big names like the gap and l brands, the owner of victoria secret and bath and body works posted disappointing revenue. the concern is the just completed back to school season is the second biggest shopping period of the year behind december holidays and the tight fisted shoppers won't plan on spending much later this year. joining us to talk about economic and current economics is hue johnson. good to see you again, hough welcome. >> thanks. >> it seems like now that we pushed up to 3%, can stocks continue to go higher if interest rates continue to go higher? >> you know, it's not at all unusual in financial market
history for the stock market to be going up and interest rates going up at the same time. it's only when interest rates get to a level that presents problems or it looks like it's going to kill off in this case the automobile sales and housing, which have been very strong or kill off the economy that the stock market really runs into problems. so it serves as a drag on stocks but it doesn't kill off the bull market until we get to a higher level. thankfully, we started from a low level. that's the good news, and the second piece of good news is that if you take a look
>> i couldn't disagree more. what we see going on, you know the return from stocks has been positive. the return from bonds has been negative. i think that's an on going process. i think we still have further to go in the current sicycle. if we have further to go in the current cycle in 2013 and 2014 the return of owning stocks will be significantly higher than owning any fixed income s securities, whether long term or short term and to put numbers on it, i think the returns will be closer to 9.5% on the stock market and down as low as 2.5% from the fixed income market. so people should not back away from the equity markets, that's where the returns will be the best. >> where are you putting your money? stocks would you buy right now,
hough? >> bull market sectors primarily. first of all, consumer at the list, financials, industrial and healthcare. those look good on evaluation but also have been performing well. so we've been buying companies like in the consumer area, johnson controls in the healthcare area company like my land, industrials and first republican bank which is a financial company, a bank company. so those are the kinds of things we're buying and again, we're maintaining a fairly meaningful exposure to the stock market because that's where we think the returns will be the best. >> a little time left. i want to ask you about the big jobs report coming out tomorrow, what it would mean for stocks, bond ps as and the fed. quick answer. >> based on the adp report today it's tough to forecast employment but looks to me like the numbers tomorrow are going to show that we grew more jobs
than as the consensus expectation. i think what that will do is be fairly good for the stock market. it will be negative for the bond market. interest rates might edge up further. it will guarantee the federal reserve will announce they will reduce the stimulus starting at the end of the september. again, i think it's positive for stocks, negative for bonds and it's good for the on going cycle. so that's what i think will be the outcome. >> thanks so much, always great to see you. hough johnson. investors are also paying close attention to an important meeting with the world's top leaders. president obama is st. petersburg russia for the kick off of the g 20 summit. what is topping the agenda for the world's largest industrial meeting. >> reporter: the g 20 meeting, the issue of syria is overshadowing the talk of economic coordination, which is so sorely needed by the global economy at this stage.
president obama touched down with no by lateral prospect with his host president putin over issues like edward snowden, asylum issues and indeed, of course, over syria and seems no accord between the united states and some of the other key members. not just russians making noises about their concern about american military action in response to the chemical attack, which has been blamed on assad in damascus. the chinese also have warmed the americans and others actually this could affect the broader global economic growth and could affect energy prices and increase those because of tightened tension in the middle east. president putin is critical of any potential u.s. action. especially john kerry, but the russians are desperate to get accord on other issues including long-term infrastructure, tax issues, regulation, whether we can see accord and coordination on key issues and indeed
concerns over what tapering will do in the united states to the broader global economy rehaynes to be seen. we're undoubtedly over shadowed by syria and not expecting common accord from the g 20 on that political issue. >> steve, thank you very much. united contin then tell is recalling pilots grounded. they were put on work furloughs after united and continental merged so it's recalling the last remaining furloughed pilots to meet the future staffing needs. the nation's largest bank is getting out of the student loan business. starting october 12th, jp morgan chase will no longer accept new applications for student loans even from chase customers. the bank says it can't compete with lower rates available from the government through stafford and perkins.
wells fargo already ended making new student loans. in cities all over the u.s. today, walmart workers and their supporters took to the streets demanding higher wages, better jobs, and the right to form unions. but many of the protesters including some who were arrested, weren't store employees and walmart is te defending what it pays the staffers and how they are treated. >> reporter: about 40 protesters associated with our walmart showed up outside the manhattan office building of walmart bored member christopher williams today. they brought a petition with 200,000 signatures to present to williams asking for a public commentment to walmart providing full-time work with a minimum salary of $25,000 and reinstatement of the 25 workers fired since june for striking, an agreement to stop retaliation against workers calling for better jobs. walmart says on average full time hourly associates make
$12.83 an hour, equating to $25,000 a year. few are given full-time hours making supporting a family difficult. this location in new york city is only one of 15 planned cities protests for walmart. the people gathered here, some walmart employees but the majority of them are just general supporters and activist fighting for the same causes. only two of the new york protesters are current walmart employees. two are former associates. lucas handy says he was fired for speaking out. barbara girth currently works in colorado. >> when i started at walmart, they hyped it up to be like the best company to work for and over time, it fell to pieces. >> i feel strongly enough -- i feel very passionate about the way that walmart treats their associates is wrong, that i will stay here or i will go to jail. >> reporter: walmart says quote
a hand full of union media stunts made up primarily of union members and activist don't represent the views of the vast majority of the 1.3 million associates who do work for walmart. more protests will take place this evening at the san francisco home of walmart board member and yahoo ceo marissa mayer. for "nightly business report," i'm courtney regan in new york city. let's take a closer look at this issue, our two guests have opposing views. robert is former labor secretary and i ca and economics professor. robert is also author of the book the walmart revolution, how big box stores benefit consumers, workers and the economy. thank you for joining us. let me begin with you professor. you wrote a piece today with this title, why we'll be better
off if the walmart protests fail? >> i think the protests -- while they may be well-intended no some cases would have economic disaster effects if successful. the problem with america today is not low wages but high levels of unemployment, high levels of part-time work. only 58 out of every 100 adult americans working compared with 64 or 5 a decade ago. trying to raise wages and raise labor costs to employers will make life miserable for workers because it will lead to unemployment. it will lead to higher prices for consumers who purchase goods at walmart, the most popular store in the united states, and will have generally undesirable effects across the economy. >> robert rice, i believe you disagree with that. make the opposite case. >> well, first of all, you know,
the minimum wage right now, if it were adjusted for inflation from 1968 would be 10.40. it's $7.25 right now. low wage workers in this country are really not being paid enough to support their families, and unlike 20 or 30 years ago where most of your low wage workers or many of them working for big box retailers or fast food outlets were teenagers, now most of them are adults and the typical low-wage worker is actually supporting his or her family, and the family depends upon it. the other point that's important to say is that walmart can certainly afford this. big corporations certainly can afford it. if you look at the entire economy, corporate profits are up higher and wages are down to the lowest percentage than they have been in 60 years. the median wage continues to drop adjusted for inflation and
this is a huge problem not only for low wage workers but for the economy overall because after all, who is going to buy all of the stuff we produce if consumers don't have enough money? >> let's get reaction from professor. walmart can aboard to do this, makes a ton of money. companies like costco, starbucks pay workers good wages and benefits and still, stocks are doing well. why doesn't walmart learn from their example? >> well, i think walmart found that it's business model works very well, it is the most successful retail sales company in the united states, but they only -- they made $17 billion in profit last year. that sounds like a huge amount of money, and it is a large amount of money, but it's only about 3.5 cents on every dollar of sales, and they employ walmart employees worldwide 2 million workers, most of them in the united states. if you gave everyone of them say an extra $2 an hour raise and
multiply that 1500, 2,000 hour as year and add additional money for benefits, healthcare workers are demanding, we would be -- those profits would largely disappear, the price of walmart stock would fall in half. pension funds would find losses, ed set tra. >> robert rice, quick response? >> well, i simply disagree. the numbers actually do add up in term of giving walmart workers and low wage workers a race and again, i want to emphasize and this is something that even henry ford understood in 1914, you give workers a race they can buy stuff and right now walmart is the largest employer in the united states and taking the part time workers, it's typical pay is way below $9 an hour. that is not sustainable in terms of this economy or any family. >> okay. we'll have to leave it there. gentlemen, thank you so much for joining us. this is a conversation that will
continue for sure. professor robert rice from burkely. the multi-billion-dollar race to treat alzheimer's disease and the companies at the forefront but first, how the international markets closed the day. no bargain today for groupon shares and that's where we start tonight's market focus. shares jumping after morgan stanley raised the rating to over weight siting straight in north america. they rose to $10.66 but more than doubled so far this year. another company seeing strong gains today, the
distributor of fasteners and construction supplies. it says sales in august surked 7% from a year ago thanks to strong demand. shares up more than 6% to $48.60. a huge gain in the shares of kadon after sks said it would pay them. the deal value kaydon at 35.5 each. they closed at $35.55, up 23%. shares were a drag on the s&p 500 after bar clays downgraded from over weight saying that stock is basically over valued. shares fell to close at $30.30. now to a healthcare issue that impacts families all around the world. alzheimer's, 30 million people are affected globally and that number is expected to double by the year 2030. it's been more than a decade since a new treatment has come
to market with some of the most promising drug trials coming up short last year. a treatment that reverses or slows the disease could mean billions in annual global sales. bertha coombs has more. >> reporter: dick perdy was in his mid 70s dig nosagnosed but 2, they are still gone. the goal is to keep him healthy and living at home and getting him enroll in a new clinical trial. >> we've been part of the medical community all of our adult lives and since we are not going to be part of the cure, clearly, at least we can participate in the work that's being done. >> reporter: after more than two decades of research, developing a treatment that slows the progression of dementia has proven elusive because the root
cause of alzheimer's remains unclear. >> the scientific community really doesn't understand the disease completely as the scientific community understands cardiovascular disease for example. >> reporter: a number have targeted plaques that build up in brains of dementia patients with little success. the biggest disappointment, a late-stage drug from phiser and j and j that did not slow memory loss costing $1 billion in losses and prompting them to end research efforts. >> that's a concern for us to make sure the drugs are developed and get to the market itself. >> reporter: yet the demand for new drugs is growing. dementia affects more than 5 million people in the u.s., 35 million worldwide according to alzheimer's disease international with numbers expected to double by 2030 and triple by 2050. analysts say the pay off for a drug that succeeds in slowing the progression of the disease
could be more than $20 billion in annual sales, that has companies taking a new tack where others failed. >> we have new data that suggests proteins changing the brain may start anywhere between 15 and 20 years before the clinical onset. >> reporter: eli lilly is looking whether it may be more effective in early stage dementia patients while mirk is targeting an inhibit tore with mild symptoms. >> we probably won't see results from the studies for several more years. >> reporter: maybe a little hope says gloria purdy. >> i don't have hope s for the future, but it's a day at a time. it's not a pleasant day at a time. >> it's because i'm charming. >> and dick said it's because he's charming. >> bertha coombs, "nightly business report." >> and he is. coming up, the roller costar
economy but first a look at how commodities, currencies and treasuries faired today. as summer draws to a close it's a season to remember for the major theme park companies. sales for nearly every one was sizzling hot. cedar fairs owns sandusky point in ohio. it raised the full year guidance yesterday reporting strong results through labor day thanks to higher spending per customer. so it's no wonder that the stock has skyrocketed more than 30% so far this year and as jane wells tells us, they are not alone. >> reporter: the economy is on a roller coaster, but in the theme park business, it's mostly going
up. >> once they get to the park, they have been spending it on food, merchandise, games. >> reporter: most theme park companies are reporting record numbers. disney parks was the fastest as it benefits from cars in anaheim. >> absolutely this will be a record for disney on the theme park performance. >> reporter: comcast universal studios is reporting healthy attendance. it's planning to spend over a billion dollars on new projects like expanding the harry potter franchise. and smaller companies like six flags are reporting record revenues. >> overall, you know, i think six flags is doing particularly well, given that their att attendance is less aftluent. >> reporter: companies are trying to make it worth your while. the ceo says they have to keep
investing in new attractions. >> 80 or 90% of the people are repeat visitors. they need something new. they want to come back and ride that log ride but they need something new, so we all play that card. >> reporter: the only company coming up wet is sea world. attendance is down and sea world is blaming part of that on the weather. while many analysts expect a better second half for the company, a new documentary about the treatment of orcas in captivity may be hurting. that seems to be the only pause and the industry gears up for the second most important time of the year, halloween. for "nightly business report," i'm jane wells, hollywood. >> and now to another kind of fun, the nfl season kicks off tonight and if you don't have season tickets, it's going to cost you more, a lot more to go to the game. according to ticket brokers, prices are up 5% to an average
of $201. the team with the most expensive average ticket price, the chicago bears coming in at a whopping $433.59. the lowest, the jacksonville jaguars at a relatively cheap $101.60. >> and then the couch at my house. >> exactly. >> and free seats. >> and you get replay and free popcorn. >> exactly. >> that's "nightly business report" for tonight. i'm susie gharib and for more on the stories we covered tonight, join us online at nbr.com. >> i'm sue herrera, have a good night everyone. night "nightly business rep has been brought to you by. >> sailing through the heart of historic cities on a river, you get close to local life, to cultural trels sures, viking river cruises, exploring the world in comfort. kevin: today on "ask this old house"...
check this out. you turn this shower valve to cold, no problem. all the way around to hot, barely a trickle. i'm going to show you how to fix it. this backyard is wide open now, but we're going to enclose the whole thing with a low-maintenance fence. want to put a little concrete on all four sides. woman: we're looking forward to being able to be out here playing everyday and not worried about the street. it's got a heavy metal base with a top that spins. what is it? kevin: next time on "ask this old house." the real question is, what can't you do?